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Tesla Might Hit Two Milestones: Are the Bears Watching?


Oct. 21 2019, Updated 12:52 p.m. ET

  • Tesla has delivered a record number of cars for two consecutive quarters and seems to be on track for another record in the fourth quarter.
  • Meanwhile, Tesla might soon hit two more milestones. The company plans to hit a production milestone of 10,000 cars per week by the end of 2019. Looking at its growth trajectory, its total global fleet should soon surpass 1 million vehicles.
  • However, there are two additional milestones that the company needs to hit in order to silence its critics.
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Tesla milestone

Since it went public, Tesla (TSLA) has hit several milestones. For any company in its initial stages, the growth graph is steep, and so are these milestones. Now, TSLA appears to be on track for two more milestones.

On several occasions, Tesla and its CEO, Elon Musk, have expressed optimism that the company would hit a weekly production run rate of 10,000 vehicles by the end of the year. The China Gigafactory is also expected to start mass production this year.

Incremental units from that plant would also boost the company’s production capabilities. For a company like Tesla that’s apparently supply-constrained, higher production capability should translate into higher sales.

One million cars

Looking at Tesla’s growth trajectory, the company’s total global fleet could soon cross 1 million vehicles. In my view, this would be another notable milestone. Tesla bears have mocked the company for its limited production and manufacturing footprint. The company has also faced several production hiccups that have hit its shipments as well as investor sentiments.

After regularly criticizing established automakers, Musk praised their production abilities in one of his tweets. Read Tesla’s Musk Praises (and Warns) Other Automakers for more analysis.

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Tesla bears

Tesla bears tend to focus more on the company’s misses and its frequent losses. Furthermore, the company has missed multiple deadlines. That said, even bears would acknowledge that TSLA has established itself in the pole position in the electric vehicle market. Few would fault Tesla cars for their performance. The company has established itself as a benchmark in the electric vehicle category. It wouldn’t be an overstatement that Tesla’s brand has become synonymous with electric cars.

The company also has an energy products division, and Musk termed 2019 as “the year of the solar roof.” However, the company’s solar roof product hasn’t had the best year amid reports of frequent losses.

Future benchmarks

While Tesla might soon hit the 10,000 weekly production and 1 million outstanding fleet milestones, I believe that it needs to hit two more landmarks to silence critics. Firstly, it needs to ship more than 1 million cars every year to be seen in the same league as established automakers like Ford. Even at the top end of its guidance, TSLA expects to ship only about 400,000 cars in 2019.

In my view, another key milestone is for Tesla to post an annual profit, which it hasn’t done since it went public. Tesla bears frequently focus on its perennial losses, and some doomsayers even predict that the company would go bankrupt due to its losses. That said, Volkswagen CEO Herbert Diess recently said that he does not believe that TSLA would go bankrupt.

Check back with us, as we’ll discuss why the 1 million annual shipment run rate and sustainable profitability are crucial drivers for Tesla. In the meantime, you can check Tesla: Hard to Ignore for Both Bulls and Bears to analyze what makes TSLA such a polarizing company.


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